by Mitch Kokai
Senior Political Analyst, John Locke Foundation
When COVID-19 struck in 2020, the government quickly put together massive aid programs to help struggling businesses, along with the people who lost their jobs.
But other kinds of enterprises with names like the Traveling Vice Lords and the Wild 100s — criminal street gangs in Chicago and across the country — soon figured out how to take advantage of that safety net. They defrauded those programs of millions of dollars that they used to buy guns and drugs, according to the U.S. Justice Department and court records.
Incarcerated crooks were in on the act, too. The government estimates that, across the country, at least one-quarter of a billion dollars in fraudulent unemployment insurance benefits went to inmates in federal prisons.
It was no secret how to cheat the system. Tennessee rapper Nuke Bizzle got six years in prison after admitting he pocketed more than $700,000 in bogus COVID-19 unemployment insurance benefits. He glorified the scams in a YouTube music video that got almost 290,000 views.
“You gotta sell cocaine. I just file a claim,” the 34-year-old rapper, whose real name is Fontrell Baines, brags on the video.
In Chicago, the price of illegal guns soared during the pandemic, but gangs were able to pay for them with fraudulent COVID-19 relief proceeds, according to federal agents. In Milwaukee, a gang member even used ill-gotten coronavirus relief benefits to pay for a man to be killed, authorities say.
“We’ve repeatedly seen a connection between violent crime, violent criminal street gangs and the COVID fraud space throughout the country,” says Michael C. Galdo, director of COVID-19 fraud enforcement for the Justice Department.
“I don’t think anyone’s ever seen anything like this in terms of the fraud,” he says. “Word got around pretty quickly that these programs were vulnerable.”